Economic Prejudice?

[Dari]

Simple Question: Why do most economists (understandibly) consider Europe's Economic Stability and Growth Pact stupid but the IMF keeps telling Argentina (and, soon, Brazil) to fasten its belt when it comes to fiscal policies and budget deficits?

As the global recession lingers, one would think that governments would be told to spend more money to prop up flagging economies?

 

[tm37]

Governement spending does not equate to strong ecomony in fact it can accually hurt it.

Economies are driven by production and demand. When the government get involvedit ususally hurts the overall economy

 

[HappyPuppy]

Where do the governments get the money they spend? From taxes. Higher taxes take away from disposable income. Less disposable income means less spending on products. Downsizing, layoffs lead to increased unemployment.

 

[Tominator]

I've never heard of government spending doing a thing to prop up an economy except possibly in time of war.

Government, be it the US or elsewhere has a dismal return on the money spent.

Most of the world would be economically bankrupt without the US dollar. Japan has been in a severe recession for almost 15 years. The US dollar keeps it afloat. US dollars prop up the Euro and US markets are THE place to sell goods.

The biggest reason everyone wants a piece of the US economic pie is lower taxes.

The less money government has the better and I do not care what type of government!

 

[Dari]

Governement spending does not equate to strong ecomony in fact it can accually hurt it.

It does when the economy is in a recession, like a lot of the world's economy. By cutting taxes and increasing social and economic welfare during times like these, the government kicks in where the private sector has underperformed by providing the necessary resources to sustain the citizenry.


The Stability and Growth Pacts essentially tells the countries in the EU to increase taxes and cut spending during recessions or be fine 0.5 percent of GDP (OUCH).

THe IMF is telling Argentina to cut spending in it worst recession ever, with over 20% of the population out of work. That's sheer stupidity.

 

[Tominator]

Originally posted by: Dari

Governement spending does not equate to strong ecomony in fact it can accually hurt it.

It does when the economy is in a recession, like a lot of the world's economy. By cutting taxes and increasing social and economic welfare during times like these, the government kicks in where the private sector has underperformed by providing the necessary resources to sustain the citizenry.

That is utter bullcrap!

The neccessary resources of substanance have NEVER been in government hands.

What underperforming resources?

Welfare only makes it easy NOT to work!

If you mean that extending some benefits over their normal cuttoff due to a very defined set of circumstances, possibly. However your blanket statement is plain foolish imho.

There are TONS of jobs available. The problem is that many live so close to the ecnomic edge even a small decrease in their earnings has them crying.

You WANT to work? I can get you a job that will pay you 40,000 a year to start and 60,000 per year in 3 years. Training included. People are only held back by welfare and those that attempt to scare you such as the Democrat Party only seek to control you even more.

 

[ElFenix]

Originally posted by: Dari

Governement spending does not equate to strong ecomony in fact it can accually hurt it.

It does when the economy is in a recession, like a lot of the world's economy. By cutting taxes and increasing social and economic welfare during times like these, the government kicks in where the private sector has underperformed by providing the necessary resources to sustain the citizenry.


The Stability and Growth Pacts essentially tells the countries in the EU to increase taxes and cut spending during recessions or be fine 0.5 percent of GDP (OUCH).

THe IMF is telling Argentina to cut spending in it worst recession ever, with over 20% of the population out of work. That's sheer stupidity.

argentina and brazil finance that spending by floating bonds, not by collecting taxes, and they pay off the bonds by printing more money, not collecting taxes or perhaps issuing more bonds. by printing more money they create inflation, which has been ruinous to their economies. europe has proven it can control its inflation, especially with the bundesbank in control of european monetary expansion. brazil and argentina have not. the policy that europe going to is stupid based on the fact that they implement sound monetary policies year after year.

 

[XMan]

You WANT to work? I can get you a job that will pay you 40,000 a year to start and 60,000 per year in 3 years. Training included. People are only held back by welfare and those that attempt to scare you such as the Democrat Party only seek to control you even more.

Seriously??? Doing what? Heck, I only make like 45 now and I've been where I am for over six years.

 

[Tominator]

How about driving a semi over the road? Some of these guys drag home 70,000 a year plus benefits. Union drivers make as much as 80.

 

[IGBT]

Replace the word "government" with the words "tax payer" and read your post again.........

 

[glenn1]

As the global recession lingers, one would think that governments would be told to spend more money to prop up flagging economies?

I see for some that Maynard Keynes still holds influence. Can't we let his stupid and discredited theories rest in peace?

BTW, Europe has proven itself quite adept at screwing its collective economic pooch, so they don't need the help of the IMF to do it.

 

[ElFenix]

Originally posted by: glenn1

As the global recession lingers, one would think that governments would be told to spend more money to prop up flagging economies?

I see for some that Maynard Keynes still holds influence. Can't we let his stupid and discredited theories rest in peace?

BTW, Europe has proven itself quite adept at screwing its collective economic pooch, so they don't need the help of the IMF to do it.

huh? keynesian economics isn't that bad off... sure, the neo-classicists have come back pretty strong, and gov't spending is a blunt instrument, but i don't think stupid and discredited is something to say about it. i'm not convinced that V hasn't been accelerating over the past decades.

 

[Dari]

The IMF has NOTHING to do with European monetary policy. While I recognize the fact that Europe is good at managing its policies and the South Americans are relatively terrible at it, it just seems odd for the IMF to force those countries to tighten their belts (to get loans) at a time like this. If anything, they should be promoting a looser fiscal policy, in recognition of business cycles.

 

[WinkOsmosis]

Originally posted by: tm37
Governement spending does not equate to strong ecomony in fact it can accually hurt it.

Economies are driven by production and demand. When the government get involvedit ususally hurts the overall economy

That is just plain WRONG. What do you think the FED is for?